Post Office Proposes Special Rate For Mailing DVDs

An anonymous reader writes "The United States Postal Service is seeking to implement a special postage rate for companies such as Netflix, GameFly and Blockbuster (PDF), which send DVDs to their customers and then receive them back. This proposal for special rates for two-way mailers of optical disks follows a protracted legal complaint from GameFly, which argued that Netflix was receiving special handling by the Postal Service while paying a cheaper postage rate."

Comments

The rest of the story

[KalvinB]

http://arstechnica.com/gaming/2011/03/the-cost-difference-in-mailing-netflx-vs-gamefly-all-of-gameflys-profits/

The reason GameFly pays more is because their mailers weigh more. Netflix keeps the mailer at 1 ounce and pays 44 cents each. GameFly's mailer is 2 ounces and they pay the two ounce price. The big giant clue in the linked article is that the USPS is considering changing the price of the 2 ounce mailer to the price of a 1 ounce mailer.

So the real story is that GameFly wants a discount with zero actual justification.

The packaging for GameFly costs more. Work it into your business model or reduce the packaging weight.

I don't do business with GameFly but if I did, I'd cancel. They actually have the nerve to pretend Netflix is getting some kind of special treatment while they are the ones seeking it.

There is nothing unfair about what the USPS is doing. The rest of us have to pay by the ounce for our mail.

Re: The rest of the story

[kiddailey]

Not excusing this, but perhaps they've tried and haven't been able to redesign a mailer that doesn't somehow infringe on Netflix's mailer patent (and any others that likely exist):

http://www.google.com/patents/US6966484

Re:The rest of the story

[bill_mcgonigle]

I was a Netflix subscriber when they switched over to the current, thin mailers. The story at the time was that the new mailers could be handled by the automated sorting machines at the USPS facilities and that the difference in cost between postage and breakage was strongly on the side of postage - Netflix was willing to absorb the additional breakage, which they expected but at a low level, based on statistical sampling and tests they'd conducted.

One discontinuity is that, I think, the game discs are several multiples more expensive than the DVD's, so GameFly can't absorb as much breakage. That's probably why they've still got the thick mailers and why their subscription prices are 50% higher than Netflix.

It sounds to me like they have a more expensive business model and are asking the USPS to subsidize it.

Re:How is this news?

[Mitreya]

I have to wonder if this law getting passed couldn't be traced back to Fed Ex and UPS wanting the business that USPS was doing so found a way to stick them with a bill that they could never pay while remaining able to compete.

USPS is also not allowed to raise prices beyond some (official/fudged) price index increase.

It lets them tie a boat anchor to USPS so that USPS ends up in a bind and either has to cut service or raise prices, both of which benefits UPS and Fed Ex.

UPS/FedEx constantly use USPS on "unprofitable" routes, because USPS is also required to keep prices relatively constant. So if the package is going to the middle of nowhere, UPS and FedEx will gladly outsource it to USPS which will deliver it at a loss. USPS cannot actually raise prices, but if they cut services, that may actually harm their competitors.

Re:How is this news?

[Y-Crate]

Because unlike every other business on the planet Dubya passed a law that says the USPS has to have the ENTIRE retirement plan, to the very last penny for every single employee, funded for something like 40 years?

It's worse than that. The law gives the USPS 10 years to come up with 100% of the money needed to fund all of its pension requirements for the next 75 years.

It's designed to destroy the USPS so Republican lawmakers can bemoan how government has once again failed to deliver. Except that they're the ones who have failed us.

Re:dumb

[PRMan]

Because then I couldn't send it back just by sticking it in my mailbox at the curb.

Re:Why would I click on a PDF story link?

[SeaFox]

It's from a government site. NSA paranoia aside, a Postal Regulatory Commission complaint is not going to contain some ridiculous scripts or other executable bits.

You always have the option of opening it with the built-in PDF reader on Firefox, which would only be able to open the plain document portion of it if there is anything else embedded.

Re:How is this news?

[Cardcaptor_RLH85]

Yes, it makes sense to pay up your pension fund in advance...not 75 years in advance though! By paying into your pension fund 75 years in advance, you are funding the pensions of employees who haven't even been born yet. I can see requiring that the next 25 years worth of pensions are funded in advance but 75 years is insanity and for most businesses would be completely untenable.

Re:How is this news?

[artor3]

Okay, here's the deal. You have until your 30th birthday to fully fund a retirement account that must last until you turn 95. If you can't, you must declare bankruptcy and lose everything. Sound fair?